12: Amortization management: The underestimated EBIT lever in the sales of automotive suppliers

Margin pressure is high in the automotive supply industry, price wars are the order of the day and sales forecasts are often like looking into a crystal ball. In this environment in particular, strategic levers for improving earnings are worth their weight in gold - especially if they have a direct impact on EBIT and are relatively easy to implement.

One such lever is systematic amortization management. However, this area is still neglected in many organizations - with considerable financial risks.

The problem: invisible underpayments from amortization

Many suppliers correctly factor amortization into their parts prices - at least on paper. In reality, however, the increasing volatility of quantities means that the originally calculated quantities are often not achieved.

What does this mean in concrete terms? If, for example, a supplier generates 10% of its turnover via amortization-relevant shares and the actual quantities deviate from the planned quantities by 30% (which is currently not uncommon), this results in a direct EBIT risk of up to 3%. In a market with tight margins, this amount can make the difference between profit and loss.

And the fatal thing is that the underpayments often go unnoticed. This is often due to a lack of transparency regarding actual quantities, outdated calculation data or simply the fact that there is no centralized tracking of amortization.

The solution: systematic amortization management with Digital Automotive

To eliminate this risk and realize the full potential of your contracts, you need an automated, end-to-end system. Digital Automotive offers exactly that - fully integrated into your existing sales planning and management.

1. Automated provision of the right quantities

The basis for correct amortization tracking is realistic, continuously updated quantity planning. With Digital Automotive, the quantities for the amortization calculation are automatically taken from your own sales planning or from reliable market sources such as S&P Global Mobility.

The advantage: your plan/actual deviations are visible, up-to-date and traceable at all times. This creates the basis for accurate calculations and well-founded renegotiations.

2. Central storage of negotiation results

Another typical weak point in many companies: The results from price and amortization negotiations are not centrally documented or get lost in the e-mail inbox of individual employees.

Digital Automotive solves this problem by automatically storing all amortization agreements in a database - searchable, version-safe and fully traceable. So not a single cent is lost.

3. Automated amortization tracker

The heart of the solution is the amortization tracker: it links the agreed amortization amounts with the actual quantities from the ERP system and automatically detects any underpayments. These are immediately visible and can be actively tracked - including specific amounts, affected projects and customers.

In this way, you create a new quality in the management of your sales performance - and above all: you get back what you are entitled to.

Conclusion: If you don't systematically manage amortization, you are giving away margin

The times when you could rely on predictable volumes and "fair" OEM partnerships are over. If you want to be successful today, you not only need good products, but also excellent sales management - down to the smallest detail.

Systematic management of amortization is not a nice-to-have, but a clear competitive factor. It protects your EBIT, creates transparency and strengthens your negotiating position - especially in times when every percentage point counts.

If you would like to know how you can leverage this potential for your company, we invite you to a live demo of Digital Automotive. Experience how you can create transparency and secure your margin with just a few clicks.

👉 More information & demo date: www.digital-automotive-supplier.com